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Greece must enter into the reality based economic world, where its income and its debt are related to its productivity and the value it has in the global economy- which is substantial. Remaining in the Euro-Zone is to remain in a fantasy of European integration which does not exist. The fantasy of Europe is crippling the reality of Greece. Once it leaves the Euro and re-enters reality, it will have the pleasure of self responsibility- to balance its books, reform its economy, introduce market reforms, tax its elites- or not, as it sees fit. Remaining in the fantasy of Europe only delays this reckoning with reality and responsibility- to the detriment of Greece, its citizens, and its future.

The "budget/wage cuts in exchange for debt relief" strategy failed in 2009, it failed in 2011, and it will keep on failing. Europe's problem is a structural balance one. Cutting wages and prices drains demand, which exacerbates Greece's debt burden. In fact, that's been the story of this crisis-- massive austerity that has failed even to reduce the relative burden of the debt. The missing piece of the puzzle is that Europe badly needs Germany to accept higher inflation, and to enact a stimulus to add demand. Their refusal to do so, more than anything else, has crippled Europe, and their continuing insistence on beggaring their neighbors has been massively destructive to the continent.

I prefer to refer to Syriza as a left wing party, which has now won a majority, displacing a radical right wing coalition.
Viewed over the last 60 years, Syriza is not at all radical and hardly even leftist.
Viewed over the same time frame, most OECD countries are governed by radical right wing parties - the most radical of all being the US and the UK.
I hope that this election, in which a rational progressive party has won a majority, is the start of a powerful movement within the OECD countries away from radical right wing policies and back to the rational centrist policies of previous decades.

The Greek problem is really a European problem. In trying to form a multi-state economy such as the US, Australia and Canada they have failed in one aspect. Whereas the US, Australia and Canada have states and provinces that support each other through low economic times with a system of transfer payments and federal spending (the "have" provinces giving to the "have not" provinces), the EU depends on loans which have to be repaid. It is understandable to do this, no German, Brit, Frenchman will want to give money to poorer countries, it is political suicide to do so, but necessary if the weaker countries are to prosper and one day become "have" countries.
Given that, Greece could well do well to leave the EU. Their currency would devalue helping trade and tourism, less imports means higher local production, foreign investment would increase with a new currency value. Sure the short term will hurt, but it will no matter what happens if the EU doesn't change its policies.

The author provides a saccharine description of the misery that austerity has dumped on the 99% in Greece. It's much worse than that for the 99%, who have been cheated out of their future by the actions of the 1%

I hope the new government solves this problem by punishing the 1% with the ferocity that they have used in slashing the lives of their countrymen.

"Behind every form of fascism, lies a failed revolution."---
Simply, Syriza is the only expressive form of revolt currently allowed to the Greek people. If the movement fails, we will inevitably fall under some more explicit form of authoritarian rule. Now quite honestly, trying to repair an aircraft in mid flight seems to be an impossible task, so in this particular instance it may be best to let it crash so we can redesign from the start.
Taking Greece as an example, unemployment rates above 50% for the youth is an astounding issue with debilitating consequences throughout a society. For instance, if someone has never worked till the age of 35, how do you expect that person to enter the labor force and actually produce? Isn't it akin to asking a person to run while having skipped all the development stages of learning how to work?
In my view, the problem in Europe is more social and political, yet why do we keep on looking at economists for answers----

If I was negotiating for Greece, (but I admit to a lack of in depth knowledge) I would propose to swop the fixed interest debt for Sovereign Wealth Bond debt, index-linked to an index of European Average Earnings. Same debt. differt (affordable) structure.

i would allow Commerce within Greece to raise funds in the same way internally for Greeks to buy.

I would propose a 1% interest rate coupon and a maturity date way into the future for the Sovereign Debt.

I would make the tax environment for returning citizens and businesses as attractive as possible and maybe issue new Wealth Bonds so as to reduce tax levels if that seems likely to make a difference.

I would also point out the weakness of single currency regions and the effect it has in migrating skills to other nations that have fewer problems.

I would suggest that the EU discusses an arrangement in which the less attractive participanting regions like Greece (from the tax viewpoint) get to collect less income and other taxes than others - maybe every nation would pool their tax revenues and the central authority would return the amount of tax revenue to each nation that according to some formula would seem to be in the best interests of the union as a whole. So Greece would have a lower tax rate and get more tax revenue than was collected.

Just an idea - maybe someone will think around it and come up with a way to prevent that emmigration. If that is not done, why be a member of Europe? And lose your population when you could have devalued and kept them.

If the result of the Greek election is as the polls suggest, even allowing for any difference made by QE, then everyone should do their very best to keep calm. Firstly because the people of Greece will have spoken in democratic process and secondly, because keeping calm will create a good basis for negotiation. And negotiation is needed to give Greece a new start so that recovery is attainable. Lifting the debt burden is generally thought to be necessary to create jobs and growth, although bringing this about will not be straightforward. Extending time scales and other measures on all, or some of the debt, has been proposed and is being considered by some member states. Lifting the debt burden would encourage the environment in which present reforms, such as structural reform and fiscal consolidation could continue, whilst ensuring that a social safety net is in place for those in need and hope is given, particularly to the young. Any 'Grexit' after much deliberation, would have to be supported to some degree because the alternative could have unforeseen effects. So both sides should go for the more preferable and safer option.

Good analisis. except that is not time to " moderate ", there is no limit to give back the dignity to the Greek people.
The magic formula is simple,
- pay only the legitime debt
- pay the debt in a period of time that can make possible the necesary budget to satisfied the basic needs of the population
- and finally and overall, Greece must pay with the commecial superavit with the EU, not with blood.

It is too early to answer to Mr. Papantoniou. In fact, the part of his article that is not pure nonsense, is contradicting with the other part.

There are two facts, one expected outcome, and a double-sided question-mark past the outcome of the Greek elections.

Fact one: As long as currencies were backed by gold, there had always been debt "forgiveness" (jubilee). Without a central bank printing money, either all the money will concentrate to those creating it on interest (i.e., the bankers and those countries utilizing banking better), or there will be debt jubilee, again (somehow). In this approach, exploiting both paths simultaneously, might be the best --that is, printing money and "forgiving" debt (concentrating more money to the bankers should not be an option, to support any merit of being in the eurozone).

Fact two: The eurozone has gone the northern way of austerity (definitely in the wrong historical moment) for a half painful decade. This approach will either have to be abandoned soon, or coupled with accommodative monetary policy to be bearable.

The expected outcome: The Greeks will not continue on the path of both diminishing their county's livelihood and having their choices made for them from abroad (including monetary policy). This will be the message from the election's outcome (though not a fact yet). Hopefully, it will reach domestic leaders that view oversized debt expansion and GDP contraction as potentially worthwhile, as long as it is accompanied by a balanced budget; if it was only an issue of vocabulary, speaking out the name of debt slavery would improve something more than our understanding.

The double-sided question-mark: Will SYRIZA (it's initials) and "troika" attain appropriate negotiation angles? It is not clear what are the chances of that. The Greek people are willing for this to work, I believe, not regardless of the cost. It would have been much better and far more appropriate to address the situation in a collective context of debt reduction policies, but the persistence of the Germans to the negative perspective of "we are not a transfer union," has lead to this. There is still time for positive outcomes, but SYRIZA also has plenty of negative quotes in his baggage.

On last thing. Though it is unlikely for Greece to be able to counter this on its own, at this point (before growth bounces back), supply-side measures (like labor-market reform, or more "market completion") are likely to redistribute towards richer people and richer countries (and there is no investment in stagnant environment), thus increasing imbalance. Demand-side measures must come first, though the rich countries will insist and appear to be skeptical on this. Nevertheless, there has been popular consent that there is no interest --if not opposition-- to such things.

I always wonder why Syriiza is refered to as "a radical left wing party" as opposed to simply a left wing party?
The fact remains Mr. Papontoniou that had previous governments tackled "fiscal consolidation and the structural reforms" that Greece badly needed even during your tenure when debt to GDP was running at 98% mabye we could have had more progressive policies in place today . Each government in succession added to this debt burden, if this is the outcome for what is referred to as " progressive economic policy" we need to rethink the past.

"losing access to the state health-care system" ... "might be worthwhile were they helping Greece reduce its public debt to manageable levels."
This is a very very long-sighted view about economics. And the "mangeable level" of public debt, it must be supposed, is a "per se", "numerical" problem tied to figures. Do you imagine japan? How they are again alive?
I guess an hypotesis. Greece problem is not Public debt, current account imbalance, a too tight currency whith respect to the others UE countries. No, at all.
Greece problem consists in having such so-speaking economists like Mr. Papantoniou, who learned economics reading strips.
Why not an Horizon2020 research project in order to verify that?

You are right about the real problem of Greece, but, we have to admit, that is not all of it. You see, economists speaking their "expert" opinions on things they do not know, or even with disproved claims, are a world-wide phenomenon. The problem in Greece is, we vote these people as leaders! It is the long running effect of clientelistic state and relations, as well as some residual feelings from the civil war.

You are right about the real problem of Greece, but, we have to admit, that is not all of it. You see, economists speaking their "expert" opinions on things they do not know, or even with disproved claims, are a world-wide phenomenon. The problem in Greece is, we vote these people as leaders! It is the long running effect of clientelistic state and relations, as well as some residual feelings from the civil war.

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